Commerce SSS1 Second Term

WEEK  6

Foreign Trade International

Performance Objectives

The student should be able to:

    1. Explain the meaning of foreign trade.

    2. List the types of foreign trade.

    3. List the advantages and disadvantages of foreign trade.

    4. State the barriers of foreign trade.

Content

Meaning of Foreign Trade

Foreign trade is also known as international trade or external trade involves the exchange of goods and services between two or more countries. The principle underlying the buying and selling between one country and another is specialisation. The theory of foreign trade, therefore, is based on the principle of comparative cost as propounded by David Richardo. The theory states that a country should specialise in the production of goods and services for which it has a cost advantage.... View More